What about taxation?
After DTC comes into effect, capital gains on ELSS (or any other equity mutual fund) wont be tax free. Can I use ULIP for that? Can I claim returns to be tax free because of income tax section 10(D) ?

DTC - ULIP gains are unlikely to be tax free - the DTC isn't yet approved and in it's current form only those investments that have 20x of premium as sum assured will be tax fre on withdrawal. IN the next five or six years I think even that will go, so it's not useful to take on a product for tax advantages any more.